Uk
Newly listed properties in UK hits eleven year low
There is no sign of the supply issues in the UK housing market abating with estate agents reporting that the number of new properties has dropped to an eleven year low. The data from the National Association of Estate Agents (NAEA) shows that the number of properties available to buy per estate agent branch fell by a third in the last month. There are now 38 houses available per branch in August, compared to 55 in July. This is the lowest level of supply seen since January 2004, when 38 properties were also available. The NAEA monthly data report also shows that August saw a dip in house hunters, with an average of 408 house hunters registered per member branch, compared to 462 in July, a 12% drop. The number of sales completed in August rose by one to an average of 10 properties per branch in August, however, sales made to first time buyers fell to the lowest level since July 2014. One in five sales, 20%, were made to first time buyers in August, compared to 23% in July and 24% in June, indicating movement in the market is taking place higher up the ladder and it’s second and third steppers pushing through sales. ‘We’ve been banging the drum about the dwindling supply of housing for a while and this month’s report reiterates what we’ve been saying that there simply aren’t enough houses to match demand and we’re reaching crisis point,’ said Mark Hayward, NAEA managing director. ‘There are now 11 house hunters fighting after every available house which isn’t sustainable. First time buyers are finding themselves being squeezed out of the competition, which of course means it’s taking young buyers longer to get their foot on the first step of the ladder, which will in turn increase pressure on the rental market,’ he added. Continue reading
UK private rented market in a healthy state in third quarter of 2015, says new report
Landlords in the UK are preferring high demand property such as terraced houses and flats with the overall private rented sector in a health condition, according to a new trends report. On key indicators such as yields, void periods and tenant demand, the overall picture is one of steady growth, says the latest Private Rented Sector report from Paragon Mortgages covering the third quarter of 2015. The survey reveals that average yields have grown over the last three months from 6.3% to 6.4% and this growth is in line with steady growth observed throughout 2015. When asked about expected growth over the next 12 months, landlords expressed confidence that yields will remain stable and maintain current levels. On the supply side, void periods, the average period of time PRS properties spend unoccupied per annum, remain at historically low levels of just below 2.6 weeks. In conjunction with this, tenant demand is also healthy with more than half of landlords describing demand as ‘stable’ and more than 40% saying that demand is either ‘growing’ or ‘booming’. The prospects for expected demand are also positive, with more than half of landlords expecting demand to increase over the next 12 months, compared to 42% who expect it to remain stable. The survey also shows an increase in young families with children moving into the PRS, and a corresponding decrease in young couples and professionals. Despite this, demand for longer-term rental agreements remains relatively low. ‘The data is indicative of a market growing steadily and sustainably over the long term. With low void periods and steady tenant demand, which is expected to continue growing, yields remain on a gradual upward trend and landlords are confident they will continue to do so,’ said John Heron, the firm’s director of mortgages. ‘The data also reveals the changing demographic of those choosing to live in the PRS. This is reflected in the buying intentions of landlords which seem to be shifting slightly away from investing in multi-occupancy blocks, towards terraced housing, often more suited to young families,’ he added. The research also shows that average void periods, periods of time during which a PRS property is unoccupied, have dipped below 2.6 weeks per annum for the first time since 2002, down from a high of 3.4 weeks during 2010. Requests for longer term tenancies of two years or more remain low with 58% of respondents saying less than one in ten tenants ask for a longer tenancy. Overall some 43% of landlords surveyed indicated they are looking to invest in terraced houses, up from 38% in the previous quarter while the number of landlords seeking semi-detached properties has fallen from 38% to 27%. Continue reading
Falling property prices make Dubai a more mature real estate market
Falling property prices in Dubai are not totally bad news as it will make the emirate’s real estate market more mature, a new analysis report says. The report from international real estate firm Knight Frank explains how over the past decade, Dubai has been on a real estate rollercoaster ride of boom, crash and recovery. Indeed, property values halved between 2008 and 2010, but then rose phoenix like from the desert to regain most of their losses by 2014. However, the rallying prices of 2013 and 2014 set off the alarm so authorities had to react to prevent a market boom and crash cycle. At this point Dubai’s market regulators, wielding mortgage caps and a doubling of transaction fees, stepped in to reduce speculation and the report points out that this combined with other factors such as deteriorating oil prices, currency fluctuations and a series of economic and political failures in different parts of world, means lower levels of demand from most regional and international group of buyers looking to purchase properties in Dubai. On top of this there has been an excess of new build supply and the net impact has been a 12% fall in mainstream property prices over the 12 months to June 2015. ‘Nevertheless, falling prices are not totally bad news. With the government stepping in to curb speculative activity through tightening mortgage regulations and capping price increments, it is evident that lessons has been learnt from the 2008 downturn and the market is heading steadily to be more mature and better controlled,’ says the report. ‘More interestingly, with price falls continuing to outpace rental value declines, initial yields are rising. Reaching more than 7% in rental yields in the mainstream property segment, Dubai still stands tall among real estate capitals in the world for investor seeking income generating properties,’ it adds. It also points out that the rate of decline in prime residential prices of 4.5% in the year to June 2015 was smaller compared to the mainstream segment while in sub-markets, the picture is a bit more positive as well. In demand areas are mostly in the prime segment including villas, townhouses and apartments in the Palm, Emirates Hills, Dubai Marina and Downtown for example. ‘Even during the 2008 downturn, prime properties saw lower levels of declines compared to less established areas,’ Diaa Noufal, of the MENA research unit at Knight Frank Dubai office. The report also looks at the wider region. In Qatar foreigners have been able to buy property since 2004, although restricted to a few specific areas. Demand has been rising, albeit with a slowdown this year following the oil price crash and regional instability. Buyers tend to be residents of countries within the Gulf Cooperation Council, although the number of European buyers is rising. Demand for Oman property from across the Middle East and from India and Pakistan has risen in recent years. Knight Frank says this is partly due to… Continue reading
